Talking on the future direction of the market and the economy of the country and the world Manish Kumar of ICICI Pru Life Insurance Company Crude oil prices hit $95 a barrel last Friday, the highest level since October 2014, the U.S. told Moneycontrol. He further added that the market could be a bit more volatile going forward.
Let us tell you that Manish Kumar has 28 years of experience in Equity Research, Trading and Fund Management. He said that going forward the market may see volatility with a weak trend. Global market uncertainty and macro volatility can have an impact on the market. Simultaneously, domestic and global growth cycles are also showing volatility, valuations are expensive and earnings growth of companies is slowing down. Due to all this, further pressure can be seen on both the global and domestic markets.
Talking about the third quarter results which have come so far, he said that there is a big difference in the results of the sectors affected by the increase in raw material prices in the third quarter and the results of such companies which are not directly affected by this increase. has received. That is to say, there has been a difference in the results of consuming companies, cement, auto and metal companies and the results of banks, NBFCs and technology. The asset quality of most of the banks has improved. Their asset quality has improved due to control over fresh NPAs and good recovery. Apart from this, earnings of most Tier-1 IT companies have seen strength while margins of consumption companies, cement and auto companies have seen pressure due to increase in raw material prices.
Talking on the heavy selling of FIIs in the Indian market, Manish Kumar said that it is expected that the US Fed will tighten its monetary policies faster than expected. This means we may see at least 3 rate hikes this year. Along with this, the US Fed may also bring a contraction in its balance sheet in 2022. He further added that FIIs may look to capitalize more cautiously going forward, with G3 central banks aggressively tightening their monetary policy.
The volatility in the market is expected to normalize going forward due to tightness in the policies of central banks. As soon as it becomes clear that the steps taken by the central banks are to contain inflation, it will not have any adverse effect on growth. Similarly, the volatility of the market will be seen to stop.
Where to invest from 1-2 year perspective? Responding to this question, Manish Kumar has said that from a near term point of view, it is advisable to maintain a cautious view on the market. Global liquidity concerns will show their impact on the market during this period. For the time being, our eyes are on those specific sectors on which the policies of the government and the current economic conditions will have a positive impact. We can see a rise in the stocks related to the government’s capital expenditure plan.
Significantly, the government has maintained the focus in the budget on infrastructure. Going forward, manufacturing-linked stocks will also remain in focus due to the PLI scheme and improving demand and supply conditions. Further growth will require credit. Banks will get the benefit of increasing demand for credit. In such a situation, keeping an eye on the banking space. Along with this, due to the increasing expenditure of companies on technology, further IT companies can also see a boom.
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